Published in The Hill Times

By: Gary Mar

February 23, 2026

The U.S. market is a natural home for Canadian exports. Diversification requires unwinding this integration while maintaining the economic lifeline it provides.

Canada faces a fundamental trade dilemma: we have an economy that’s structurally dependent on the United States for natural, economic, and geographic reasons that account for 75 per cent of our exports, and we are also attempting to diversify in an increasingly fragmented global landscape. The challenge is not merely economic. It also represents a generational transformation of Canadian commercial relationships, infrastructure, and strategic thinking that cannot be achieved through top-down mandates. Governments cannot force diversification.

Trade happens through thousands of individual business decisions, and no government directive can force companies to abandon profitable relationships with Americans for uncertain foreign ventures.

So how can governments create conditions where trade diversifications emerge organically from private sector self-interest? By knocking down the barriers and opening pathways in as many ways as this country can. By making sure the stuff Canada makes can get to any buyer around the world quickly, easily, and cheaply. The bonus? Better productivity. Anything we can do to increase investment and exports will increase our productivity.

The U.S. market is a natural home for Canadian exports: same language, cultural similarities, buying patterns, and decades of infrastructure investment have created what economists call path dependency. It’s easy. Or it has been. Diversification requires unwinding this integration while maintaining the economic lifeline it provides. Canada cannot simply redirect its exports elsewhere. It’s a gradual process of building new relationships, infrastructure, and strategic patience measured in decades. As this country looks to build access to new markets we can do many things. I will focus on two ideas: expanding Canada’s trade agreements and making sure it has the necessary infrastructure to get products to export.

First, Canada can work to reduce tariffs to foreign buyers on imports to Canadian companies. Pushing for more trade agreements and supporting exporters with financing means that our goods have a greater chance of landing in foreign warehouses. The recent agreement that allows Canadian farmers access to China’s market is a step in the right direction. Reducing tariffs on imported materials used by Canadian firms would also help.

Second, infrastructure is also critical. Ports, roads, rails, and pipes need to be accessible everyday, without delays. After completion of the Trans Mountain pipeline expansion, domestic oil producers saw their revenues rise (holding global prices constant). Reliance on U.S. markets dropped from 97 to 90 per cent. More needs to be done—linking Canada’s productive zones to its export gateways through reliable, resilient multimodal infrastructure.

If you can’t move it, you can’t sell it.

Further expansions or new pipelines would help Canada’s high-productivity oil and gas sector. Reducing our regulatory barriers would help get things built faster: co-operation agreements between governments is one way. Overhauling the Impact Assessment Act to create a fast, clear, and focused system would also help.

Moreover, Canada needs to make sure what we have works. Work stoppages at our critical West Coast ports in 2023 halted 25 per cent of Canada’s trade for over a month, an enormous cost not only to companies trying to sell potash, agriculture products, agrifoods and other products, but also damaging this country’s credibility as a place to invest. A grown-up country serious about securing its citizens’ economic future simply cannot allow this to happen.

Canada’s ports are inefficient, too: recent World Bank data ranks Vancouver in the bottom four per cent of global port efficiency, and Prince Rupert, B.C., in the bottom 10 per cent. For example, famously-wet Vancouver historically faced a labour rule preventing loading bulk grain onto ships in the rain. While projects to fix this are finally underway, it’s taken too long. Canadian ports are slow to adopt automation, a feature of many ports at the top of the global list.

Canada faces a monumental challenge in diversifying its markets. While private companies form those markets through buying and selling, governments can help, and this boosts Canada’s productivity. Governments, especially federal, can move urgently to help position Canadian companies to be foreign buyers’ first choice for products by advancing trade agreements wherever and whenever possible. They also need to smooth the transportation pathway to allow them to get those products to buyers as quickly, reliably and cheaply.

It won’t be easy, but Canada’s future depends on it.

Gary Mar serves as president and CEO of the Canada West Foundation.